Products subject to excise duties
UK decision to invoke Article 50 of the TEU: More information
As of 30 March 2019, all EU law will cease to apply to the UK, unless a ratified withdrawal agreement establishes another date, or the European Council and the UK decide unanimously to extend the two-year negotiation period. For more information about the legal repercussions for businesses:
If your company produces or trades excise goods (alcohol, alcoholic drinks, energy products, electricity, tobacco products), you must be aware of the rules on payment of excise duties applicable.
- United Kingdomgben
* Information not yet provided by national authorities
Different EU countries may impose other taxes on these products, as well.
Note: The EU rules on excise duties do not apply in the following regions of the EU:
- The Canary Islands
- The Channel Islands
- The Åland Islands
- The Island of Heligoland
- The territory of Büsingen
- Campione d'Italia
- The Italian waters of Lake Lugano.
In some cases excise duties paid are based on those from another country:
- Monaco businesses must pay French excise rates.
- San Marino businesses must pay Italian excise rates.
- United Kingdom Sovereign Base Areas of Akrotiri and Dhekelia must pay Cypriot excise rates.
- The Isle of Man must pay UK excise rates.
- Beer or mixtures of beer with non alcoholic drinks.
- Other fermented drinks such as cider.
- Intermediate products such as sherry or port.
- Ethyl alcohol — except when it used to manufacture other products not intended for human consumption (if used for heating or propulsion it may be classified as an energy product).
Reduced rates and exemptions
EU rules set minimum rates of excise duty on alcohol/alcoholic drinks. View the full list of excise duty rates applicable in the EU on alcohol/alcoholic drinks[1 MB].
There are some additional rules that may also be applied in certain countries:
- Small breweries (producing a maximum of 200,000 hl of beer per year) or distilleries (producing a maximum of 10 hl of pure alcohol per year) can receive a reduction of up to 50% off the standard duties.
- Small wine producers making less than 1,000 hl per year can also receive reductions or exemptions.
- Excise duty does not need to be paid on homemade products not produced for commercial purposes, except for spirits.
- Reduced rates of excise duty may apply to wine and fermented drinks of 8.5% alcohol by volume or less .
Energy products & electricity
These are taxed when used as:
- motor fuel;
- fuel for heating.
Energy products used as raw materials or for the purposes of chemical reduction, or in electrolytic and metallurgical processes are out of the scope of the Directive, which means that the Member States may or may not decide to levy a tax on such use.
The main products that are taxed are:
- mineral oils;
- solid fuels: coal, coke, lignite;
- natural gas;
- alcohols, if they are intended for use as heating fuel or motor fuel;
- animal or vegetable oils, if they are intended for use as heating fuel or motor fuel.
Reduced rates and exemptions
Obligatory tax exemptions:
- Energy products and electricity used to produce electricity (but may be taxed for environmental reasons).
- Energy products supplied for use as fuel for the purpose of air navigation, except when used for private pleasure-flying.
- Energy products supplied for use as fuel for the purposes of navigation within Community waters, except when used for private pleasure craft.
Optional tax exemptions or reductions below the EU minimum tax levels:
- 'Green' Electricity.
- Electricity from highly efficient combined heat and power generation.
- Energy products used in combined heat and power production.
- Navigation in inland waterways.
- Electricity, natural gas, coal and solid fuels consumed by households.
- Energy Intensive business (certain rules need to be respected).
- Biofuels (certain rules need to be respected).
Optional tax differentiations above the EU minimum tax levels:
- Public transport.
- Commercial use of gas oil (big trucks).
- Differentiation according to quality and quantity of the energy product, (e.g. the sulfur content of the fuel).
EU rules set minimum rates of excise duty on energy products. View the full list of excise duty rates applicable in the EU on energy products[2 MB].
The EU legislation on excise duties for manufactured tobacco defines the following excisable categories:
- Smoking tobacco (such as fine cut rolling tobacco).
The EU legislation lays down the principles of taxation and sets the minimum rates to be applied.
View the full list of excise duty rates applicable in the EU on tobacco products[4 MB].
Excise goods are generally exempt from the duty when they are used:
- in diplomatic or consular relations;
- by the armed forces of any NATO member;
- by international organisations.
When excise products are shipped for these purposes, they must be accompanied by an exemption certificate.
EU countries can also exempt excise goods from excise duty when they are sold:
- in tax-free shops and are carried in the traveller's personal luggage to a non EU country or to an EU territory not subject to the EU wide excise rules;
- on board an airplane or ship during a flight or sea crossing to or from a non EU country or to or from an EU territory not subject to the EU wide excise rules.